Read about the Annual Report and the magazine The Brick on the back cover

The Progress Report - what to expectThe Progress Report is part of the overall reporting concept for the LEGO Group. The overall reporting setup consists of three independent publications that interconnect and together form the total 2009 reporting from the LEGO Group. Read more about the concept on the back cover of this report. The Progress Report, which you are reading now, is targeted to those who are interested in the detailed follow-up on progress of the LEGO Group regarding Environmental, Social and Governance (ESG) activities linked to the LEGO Group’s ability to deliver on the four promises given to all stakeholders in touch with the brand: Play Promise – Joy of building. Pride of creation People Promise – Succeed together Partner Promise – Mutual value creation Planet Promise – Positive impact The promises are the central part of the LEGO Brand Framework and are based on the values and spirit of the LEGO Group. You can read more about the LEGO Brand Framework on pages 12-13. For the 2009 reporting, the LEGO Group has developed a model to select the ESG content to focus the report on the most relevant and current issues. The model takes its starting point in relevant ESG frameworks listing a wide range of generic ESG topics. 58 ESG topics were evaluated. The first filtering was made by determining the relevance towards the four promises in the LEGO Brand Framework, where 36 ESG topics were found relevant. The 5 step evaluation of materiality, linked to AA1000 and described in the publication “Redefining Materiality” published by AccountAbility1), was used for a prioritization of the ESG issues. A top 15 of ESG issues was established. The top 15 was further reduced to 5 topics based on what is most relevant in a 2009 context. On page 3 a list of the 5 selected ESG issues can be seen with page reference to where to read more on the issues. This Progress Report also serves as the annual communication on progress required by UN Global Compact based on the fact that the LEGO Group, as the first company in the toy industry, signed the UN Global Compact in 2003. Furthermore, this is the statutory statement on Corporate Social Responsibility according to section 99 a of the Danish Financial Statements Act. The Progress Report is based on the reporting framework provided by the Global Reporting Initiative (GRI) with a self declared C application level. The 2009 report has been subject to external verification and the auditors’ statement can be seen on page 16. A geographical overview of the LEGO Group can be found in The Brick.

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...The LegoGroup: Building Strategy
Problem Statement:
The LegoGroup has been making toys successfully for 80 years and has grown to having close to 3.16 B USD in sales for the 2010 year. They specialize in toy building sets, a sector of the market that has seen 13% growth in 2010 and is forecasted to grow further. However, the LegoGroup is at a cross-road in their business plan and requires a strategic plan going forward.
Currently, the company needs to look at its existing partnerships with Disney after Disney’s significant mergers and acquisitions in the past year. Lego is regarding Disney’s purchase of Hasbro and Mattel as a threat to their market share of the toy building block sets due to potentially losing kids who want to buy themed sets based on Marvel comics. Meanwhile, the LegoGroup is straying from its core competency and is developing video games. Furthermore, the LegoGroup is not retaining a majority of its cash flows and therefore is not following a corporate structure designed for growth.
Strengths & Weaknesses of The LegoGroup, Market Opportunities and Threats
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• Incredible brand equity (quality, history, loyal following) and called ‘toy of the century’. Lego has global growth potential...

...CASE STUDY 1
Innovation at the LegoGroup A&B
- 9.10.2014
Brief Description
LEGO is a toy company established in 1932 by Ole Kirk Christiansen. LEGO offered
high quality toys and at the same time encouraged children to be creative. Over the years
they developed their products and company grew steadily and successfully till the mid
90’s. LEGO immediately noticed their fall in the market, in order to keep up they did
many innovations.As a result company was expanded with the aggressive innovations
such as new amusement parks(LEGOLAND), clothing lines, computer games, new lines/
kits (Harry Potter,Star Wars,Bionicle) etc. At first company’s sales and number of
customers were increased but then they realized that their growth strategy was not
working and there has been a dramatic decrease within their revenues and net income.
In 2004, after a huge amount of cash loss, LEGO appointed a new president and
CEO- Knudstrop. Kundstrop developed a new 5 year plan titled “Shared Vision”. Shared
Vision had three different parts and first step was basically planning to achieve increase
cash, decrease cost, clarify LEGO’s identity and make sure of that every product produced
matches company’s identity. In the second step he aimed to revitalize the core product
lines by outsourcing. And in the final step he focused on developing innovative new play
experiences.
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...Learning Team: Sustainable Product Design Report-LegoGroup
Take the lead, compile, edit, and conclusion and submit final draft
Include a cover page memo to your department head, explaining why your team chose this product.
Describe elements of your sustainable product
The elements of Lego’s 100% recycled products will decrease waste mentality, reduce the use of fossil fuels, and convert renewable energy at the LegoGroup to create a positive outcome to its goal. The goal at the LegoGroup is to transition our products to be 100% recyclable, so those old Legos could be turned into a recycling bin or sent to the LegoGroup for recyclable purposes. We’ve tried to get an accurate number of Legos in the world and it has not yet been tackled, but there is roughly 400 billion Legos scattered across the world; and probably more than half get thrown in the trash. Kids will be kids, they destroy their toys, and the parents throw the toys out and replace them with new ones. By developing a plan of sustainability the LegoGroup will be able to recycle those damaged pieces of Legos and use them in the development of new Legos or as mentioned a recycle bin.
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...to low-cost countries: Prior to outsourcing, LEGO owned and operated production plants mainly in relatively high labor-cost countries, such as the United States, Switzerland and the South Korea. The main reason for this is that LEGO built plants close to its main markets to save transportation cost. But LEGO finally realized that the reduced labor cost in some labor-intensive countries outweighed the reduced transportation cost. Then they decided to outsource to Flextronics who has production capacity in low-cost regions; b. Subcontracting to Flextronics allowed LEGO to reach the economy of scale as well as reduce production complexity by combining its production with that of other Flextronics’ clients; c. Contracting production to Flextronics can help LEGO eliminate the risk of production price fluctuations.
Learnings: a. LEGO learned from Flextronics the importance of documentation and standardization of the production, which give LEGOGroup transparency and often help LEGO manage the challenges of complexity and to identify the stronger and weaker parts and links of the production network. b. LEGO should consider more factors before they outsourcing. Things like Flextronics’ operation style, the cost and time of providing engineering support and training, and variable lead time incurred by global sourcing are really critical for...

...Summary of the case
The LEGO Group’s vision was to “inspire children to explore and challenge their own creative potential”. Its motto, “Only the Best is Good Enough,” had stuck with company since 1932 when Ole Kirk Christiansen, a Danish carpenter, established the company in the small town of Billund in Jutland, Denmark, to manufacture his wooden toy designs. As the company itself stipulated it: “It is LEGO philosophy that “good play” enriches a child’s life — and its subsequent adulthood. With this in mind, the LEGOGroup has developed and marketed a wide range of products, all founded on the same basic philosophy of learning and developing — through play.”3 With this simple idea, the company had through its history grown into becoming a major multinational corporation, and was by 2009 the world’s fifth largest manufacturer of toys in terms of sale.
The LEGOgroup began in 1932 by Ole Kirk Christiansen, a carpenter from Billund. LEGO is from the Danish phrase leg good, which means play well. Since thousand 1960, the LEGO has release thousand of set variety of themes. An Adventure journey through five years from 2004 to 2009 has taught LEGOGroup the fifth largest toys company who has signed contract with Flextronics. In 2004, radical changes took place within LEGO, organization as consequence of its internal crisis...

...Kaur-LahrmannSubject: Management Tools |
THE LEGOGROUP
1. In this case I have identified some key characteristics that are in relation with the strategy that LEGO has been following.
In the 1970-1980 decades, environment was hostile. There was a huge oil crisis, and there were too much difficulties. However, LEGO maintained its philosophy, and their image of unique and iconic brand. Competence was also hard, with Mattel and Hasbro in the market, but LEGO sustained its powerful position.
If we focus, for example, in the strategy that they carried out between 1995 and 1998, an interesting fact is that their objectives (become the best known global brand, increase the sales, etc.) are set in a long term direction.
Another important point is that they wanted to expand the scope of their activities. They entered in new areas such as films, games… and they also built new LEGOLAND parks.
However, the turnaround attempts that happened between 1999 and 2003 forced this company to check their strategy. Different factors such as the changing environment, lead times… affected negatively LEGO`s strategy. This shows that the uncertainty of strategic decisions is also decisive.
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...Portfolio 1
The LEGOGroup Analysis
June 26, 2013
Word count: 1,517
Table of contents
Title | Page |
1. Application of the PESTEL analysis | 3 |
2. Application of the Porter’s Five Forces Analysis | 4 |
3. Application of the TOWS Matrix | 6 |
4. Conclusions | 7 |
5. Figure | 8 |
6. References | 8 |
In this assignment the LEGOGroup are examined by using a PESTEL analysis (Turner, S., 2002,), Porter’s Five Forces framework and TOWS matrix, based on the information from the case study “The LEGOGroup: working with strategy” by Anders Bille Jensen, University of Southern Denmark, and sources from internet.
Application of the PESTEL analysis:#1
CONTEXT | FINDINGS | POSITIVE IMPACTS | NEGATIVE IMPACTS |
POLITICAL | Higher import tax in some countries, prevented LEGO to enter these markets before 1980’s. | Lego has to outsource its production line in those countries, it can lower the production cost, making the products to be more competitive with rivalries. | Difficult to control intellectual properties, and its supply chain. |
ECONOMIC | Outsourcing 80% of the products in the Eastern European countries and remain only 20% in its base in Billund. | Significantly reduce the production cost by outsourcing to developing countries as other direct competitors. | Possibly unwelcome by their devotees since the product is no...